To outsiders, mining is considered an ‘old industry’ with limited innovation. However nothing could be further from the truth. Cost pressures and cyclical downturns have been powerful catalysts for the adoption of new technologies into the sector.
From finding ore to autonomous operations, the industry has seen an unprecedented array of advances on multiple fronts. The pace of development has been so great, that it has been almost impossible to keep up with. Especially for time poor directors and executives.
Kirby, you made the transition from mining executive to technology executive just over five years ago. If you were to nominate the single biggest game changer in mining technology during this time, what would it be?
Easily the biggest game changer is automation of mobile mining equipment. Automated equipment is safer, more productive and costs less than human operated equipment. The business case is extremely compelling and that’s why the biggest mining companies in the world are spending up to $0.5Bn p.a. on automated technologies, and another 2-3 times that on supporting investments, including communications technology, Remote Operations Centres (ROCs), data management, application development & maintenance, training (and re-training) people, and process changes to the operating model.
What sort of operations and companies are seeing success with this technology?
Rio Tinto pioneered automation in mining – starting the journey over 10 years ago – with BHP and others catching up fast. Automating equipment is reaching into every single part of the mining value chain including trucks, drill rigs, dozers, train operations, port operations, underground load-haul-dump, and automated (or remote operated) longwall operations. One Rio Tinto automated train is actually the biggest robot on the planet. Collectively the mining industry is now carrying out the largest robotics construction program on the planet.
The tier 1 global miners are leading in terms of scale, however many small and mid tier mining companies are also investing heavily. For these companies, starting small is definitely the name of the game. That’s because of the challenge of the ‘learning curve’ for an operation is significant – involving change for people, processes, and technology – and simply ‘buying’ in the talent is problematic because companies are seeing the skills as a source of competitive advantage
Where has the role of technology been overstated, at least at its current state of development?
The take up of machine learning (i.e. applied artificial intelligence) has been slower than in other industries. Implementation is slow due to the challenge of bringing coders together with industry experts such as geologists, mining engineers, metallurgists and finance. The coding itself is readily available, for example python, R, Lisp, Prolog, Java. And the process of developing an application is well understood e.g. visualise the data, apply suitable ML algorithm, fine tune the model, pre-process and then code. The challenge is with people and org design – how to build and empower multi-skilled teams to tackle and solve high value problems – and then replicate and scale it many times over.
How are organisational structures of your clients being impacted by technology driven changes?
The biggest challenge faced is how to integrate IT and OT (‘Operating Technology’). Like many industries, IT and OT are converging at a mind-bending rate. CEOs and CTOs are grappling with the boundaries of traditional ‘mining’ versus ‘IT’. The answer is that increasingly there is no difference. The way forward is to embed technology professionals into the fabric of operations teams, sitting alongside the traditional mining professionals.
When we are recruiting a technology executive, for example a Chief Technology Officer for a mining company, what should we be looking for and considering with this appointment?
As we all know, business starts and ends with people, so the ability to manage people remains paramount. Beyond that, ideal candidates will bring a blend of IT, mining operations and business experience – look for the four-way blend: People-IT-Ops-Business. At the current rate of IT- OT convergence, it won’t be long before the industry sees the first appointment of a CTO/CIO as a CEO of a major mining company.
Technology operations experience will increasingly become valuable for other executive roles, including COO, CEO, and boards. There is a significant shortage of people with this blend, and the shortage is likely to remain a permanent feature for years. To put this in context, currently there are some 250 automated trucks in the global mining industry, yet there are ~45,000 in the entire global mining fleet – so the technology transformation journey is only 1-2% complete.
Thank you Kirby, we appreciate your time and insights.
Richard Fortune works with resources and industrial clients around the world to build cohesive and capable teams. He previously founded executive search firm Relead Group, and prior to that he was a senior consultant with a global executive search firm with a focus on resources. He commenced his career as a mining engineer in South America and Australia with BHP Minerals and Anglocoal, and was subsequently a regional business executive with Runge Ltd.
Richard holds a Bachelor of Engineering (Mining) from the University of New South Wales and serves on the Sydney branch committee of The Minerals Institute (AusIMM).